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Press Mentions

Ad Age: Why So Many Media Companies Stumble GloballyThe few news brands that have succeeded, to greater or lesser degrees, arguably include CNN, Bloomberg, People, Thomson Reuters, The Wall Street Journal, The New York Times, The Financial Times and The Economist. Other contenders are the Associated Press, the BBC, ABC, NBC, maybe CBS, National Public Radio, News Corp. and the top U.K. dailies, said Ken Doctor, the newspaper veteran who's now an analyst at Outsell. "If a news-media organization sees itself as covering the wider world, sees it as its foundation, that in and of itself differentiates it from all the local media -- newspapers, TV, radio -- out there," he said. "If, in addition, it has substantial reporting and editing resources, then it can play. The tough part is the part we're in: Who wins the race to ubiquity and can make it pay off?"

NYT: If The Globe Were Sold, What Price? “The best guesstimate of the real price: a buck. The best of an announced price: between $50 and $100 million,” he wrote in an e-mail message. The devil will be in the details of the obligations that a buyer would assume, he said, adding that “a buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands.”
He said that the Times Company could hang on to some pension liabilities or other obligations in exchange for a higher purchase price, a number that would give the appearance that it was getting something for the more than $1 billion it paid 16 years ago. He added that no bank would be interested in financing a deal given how other deals have blown up, so “the owner’s own money is immediately at risk.”

BizTimes.com: Journal Sentinel faces daunting choices“There’s no strategy – this is panic. What we’re likely to see this year (around the country) and what we’ll see in Milwaukee too is (publishers asking) how much they need to cut back and how much they can do to still hold their place in the market. For publishers, it’s about ‘How do we stay alive and stay profitable until we can get to some sort of breathing period?’ (Economic) recovery will not bring back their old business, but it will give them some breathing room.”

AP: Threat to shut Boston Globe shows no paper is safThe threat to close the paper "sends a very clear message to all employees and unions of surviving newspapers — that this is not business as usual. This is uncharted territory....Newspapers all "have a sword over their heads," said Doctor. If the industry wants to survive, he said, "everyone has to give some blood."

March 2010

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News Corp/Dow Jones

March 18, 2010

Breakfast cereal with fruit? Ammunition for the argument that all the
good urls are gone? FWIX is
partnering with the New York Times, a statement that would have
seemed like a punchline a decade ago. Now the FWIX partnership is part
of the expanding local experimentation of the Times and tells us lots
about the Times' strategic direction, its multi-front competition with
Dow Jones and a more nuanced recognition of what putting content under
your brand means these digital days.

Further, it tells us that national papers increasingly are becoming
more competitive with local ones.

FWIX is run by Darian Shirazi, a 23-year-old former software
engineer, already experienced at Facebook and Ebay. Its main
funder, BlueRun Ventures, has put $2.5 million into the company. The
goal: tapping into the bonanza of local ad dollars to come, and doing it
on the sweat of smarter and smarter filtering technology. That market:
$15 billion in local online ad dollars in 2010, as forecast by
Borrell Associates; $36.7 billion by 2014 according to Kelsey.

FWIX sounds a lot like Outside.in, which incidentally signed up Dow
Jones' local newspaper group last fall, as the two national giants, the
Times and the Journal/Dow Jones seem to be butting heads in every
conceivable way and location, from Midtown to Middle America.

The idea of the FWIX's and Outside.ins: provide a round-up of the
best local news, by aggregating local news sources, big-time and small,
blog, story and broadcast, professional and user-gen, applying some
hierarchy of quality to it. Both efforts race for the same audiences and
related advertising as the original content-creators, AOL's newly
expanding Patch
and Examiner.com.
In addition to those of course, the number of hyperlocal efforts
increases by the day (and some of them are being rounded up by local
dailies, witness the Seattle Times
aggregation, for instance).

For newspaper companies, it's a smart move. It's the end of an era,
and the Times is clearly moving on a new philosophy: gather as much
higher-quality content under its brands, national and regional, on
as low a cost basis as possible. In fact, that's become a driving
principle NYT Editor Bill Keller's been talking up. So we see the new partnerships
in the Bay Area and Chicago with professionally run non-profits,
and we see the hyperlocal experimentation with The Locals, in
New Jersey, Brooklyn and soon, with Jay Rosen, in the East Village (for
the substance and spirit behind the push, read Jay's post enthusiastic
post). With FWIX, the Times will experiment at its regional
newspaper properties first, rather than NYTimes.com, with Santa Rosa
apparently up
first.

The new-fangled word for it is curation, rounding up lots of content,
providing some hierarchy of value. Of course, it's just good editing,
bolstered by intelligent technology, and a growing flexibility to accept
and work with a wider world of voices, styles and views.

Importantly, it also asserts that readers are smart: they can tell
the difference between a New York Times (or Sarasota Herald) byline and
that of a community contributor. That assertion is a Pro-Am gamble for
the Times and all proud brands, but it's one that should be made -- and
backed up with clear, prominent and never-ending disclosure. Grab the
future, but keep explaining it to readers whose understanding of the
changes will always be uneven. (Last fall, Times Digital Initiative
Editor Jim Schachter, who is behind many of the local forays, did a Q
and A on the Times site, which tells you a lot about the company's
evolving philosophy.)

Put the Locals, the FWIX experimentation and the Chicago/Bay Area
partnerships (though the latter is most intended to retain/increase
print circulation), and you have the makings of the remaking of the U.S.
news landscape.

It used to be that 1500 daily local papers brought their readers the whole
world -- from city to state to nation to globe, with business,
sports, lifestyle and entertainment tossed in. The Times, the Journal
and USA Today were the three national reads, supplements to the local
dailies, with local single-digit penetration in any metro market.

Now those roles are getting reversed. The local dailies are
increasingly becoming purely local, and the national papers are
getting local, adding local print editions, getting hyperlocal, finding
ways to serve their readers' (and advertisers') needs beyond
national/global. It's mainly a Times/Journal fight, but just this week,
USA Today set up a big new local distribution play, joining
the Times at Starbucks stores across the country.

It's a confusing landscape. What's local? What's national? What's
digital? What's print? It's a patchwork age, and nobody's got the
answers, but as home turfs have shrunken everywhere, everyone's looking
for new lands to conquer.

February 23, 2010

Attributor's "Fair Share Consortium" got a fair amount of pub (Attributor's "Fair Share Consortium Completes Newspaper Trifecta") last year with a blindingly simple idea: monetize illegal
use of copyrighted news content. That's otherwise known as anti-piracy
as business development, one of favorite web jujitsu strategies.

Rather than huff and puff about taking down unauthorized usage,
threatening uncertain court action, just make money on it. The notion:
go to the ad servers providing the ads against the unauthorized
content, and get them to share a piece of any ad money with original
publishers, taking it from the distributor's share. That was last year,
and little progress has been made on that point. Two reasons, at least.
First and foremost, Google and Yahoo -- the two major ad servers here
-- haven't embraced the notion. Sure, they say, we want to help out
those beleaguered publishers, but, hey, it's complicated, so let's take
another meeting, and another, and another. Secondly, for publishers,
"anti-piracy" isn't the first thing on their to-do lists; avoiding (or
emerging from) bankruptcy is. Further, they've cut back staff, so even
if they signed on with Attributor as many did, their use of the
Attributor system has been haphazard.

So the Redwood City-based start-up is trying a different approach. They've dubbed their new service "FairShare Guardian."
In the next 90 days, they'll be in their trial phase of it. What's the
same: Attributor will still monitor editorial content use, comparing
publishers' content to its usage on the web, determining and reporting
what's licensed and what's not. Now, though, publishers can "outsource"
(for a monthly subscription fee, based on how much content Attributor
is monitoring) to Attributor the follow-through. If Attributor finds
illegal use -- and that's not "fair use" by a longshot, meaning at least 80% of an article is used without authorization
-- it will pursue the matter. First, one notice letter to the offending
website, then, a second, and then, notice to both the ad servers
serving ads onto those pages hosting the content and search engines
pointing to it. It's a roundabout way of saying: pay up.

Google and Yahoo routinely get such notices under the DMCA,
and word is they respond well. Here's the 90-day question to watch: If
Attributor's numbers are close to right, pointing to "112,000
near-exact copies of unlicensed articles by more than 75,000 unlicensed
sites" in a recent 30-day period, how will Google and Yahoo respond to
a flood of thousands of notices? Google will only say it responds to
DMCA notices, but won't say how many it processes regularly.

It's essential to see this new initiative in a broader context: most
news publishers are trying to re-gain mastery of their content, digital
mastery. They had total control of it in the print world, being among
the most vertically integrated industries, from in-house reporting and
ad selling to printing and delivery. On the web, though, they early
cast their content out there, hoping to increase the catch of
advertisers and readers. As their sophistication about the digital
ecosystem has evolved, they are trying to regain mastery. You can see
them applying some basic journalistic principles - 4 Ws and an H --
here. About their content, they want to know: who is using, where
they're using, when they're using, why (a tougher question) they're
using and how they're using. Answering those questions means better
content management systems and better tagging and tracking systems.

Attributor is part of that puzzle, aimed at monetizing only
the most egregious taking of intellectual property -- whole or nearly
whole stories or posts.

More broadly, we can see the AP Registry initiative and the
Europe-based ACAP project aimed at the same mastery goals. We can see
the same principle in how Hearst is using Nstein.
In New York, Dow Jones President Todd Larsen recently told me the
company would continue to expand its use of the Eidos content
management system across content groups, with the same notion in mind.
Finally, the New York Times announced it has partnered with Denver-based Thought Equity Motion to gain some sense of mastery over its burgeoning video.

Mastery doesn't mean locking up the content for most of these
companies, though some blogosphere reaction to any Attributor or
Registry plans would lead you to believe otherwise. Knowing more about
your content, and its usage, is a tool -- a vital one -- as these
companies try to take a nuanced view of how to play in the next stages
of the web, especially the potential of the mobile, tablet-enabled web.
“We are not trying to take ourselves out of the digital ecosystem," NYT
Publisher Arthur Sulzberger took pains to point out at the paidContent2010 conference.

What the Attributor system does offer publishers is one look into
content usage. A few more than a dozen publishers, including Reuters,
are signed on for the 90-day trial, Attributor CEO Jim Pitkow told me.
If the 90-day trial works -- let's see how Google and Yahoo respond --
the idea could expand from there.

February 03, 2010

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

As if the New York Times' Arthur Sulzberger and Janet Robinson didn't have enough headaches, trying to figure out how to fend off that other daily beast known as the Wall Street Journal.

Until December, 2007, when Rupert Murdoch pulled off the coup of his lifetime, cajoling, wheedling and finally hard-lining just enough of the Bancroft family into selling the prize Journal to him, the Journal had been a national business daily -- not the Times' direct competition. As the ink barely dried on the purchase agreement, Murdoch made plainer his disdain for the Times, its product, ownership and political leanings. He's also made increasingly clear -- as much in product change as in words -- his plans to drive the Times into the ground.

Now, as 2010 dawns, he's got a new weapon to use in the battle, and it has nothing to do with newsprint. It's Avatar, the stupendous, box-office-busting sensation, produced and distributed by Wall Street Journal's cousin, News Corp's Twentieth Century Fox. Avatar is smashing revenue records, going past the third dimension, pulling in more $2 billion or more so
far. That's compared to about $500 million in production and marketing
costs. News Corp's big and smart bet will be paid off magnificently.

Consider: $1.5 billion or more in profit from one News Corp movie alone. That compares to Times' total revenue of less than $2.5 billion in 2009, and probably a small operating loss (the company reports its full 2009 on Feb. 10.)

Sure, the Journal itself has seen its own P and L struggles, along with the rest of the industry, though its last-quarter results turned positive, contributing to a $259 million profit for News Corp's news and information division. Yes, it's better positioned -- business-oriented national newspaper, online subscription revenue stream -- than most dailies, but it's struggling for advertising along with everyone else.

If you're Rupert Murdoch though, you just have to say, "Take some of that blue people money and invest it in the Journal. Remember I said I wanted to kill the Times." Maybe send them flying into the infinity of the flux vortex.

So, as the Times reorganizes its digital business operations, add something new to the Times woes' of downsized ad spend, too great a cost structure and little way to gain other than ad revenues digitally until at least 2011, given its go-slower approach to metering. Add the forest people, the Navi. Yes, the blue people, too, are on Arthur's back.

As Michael Wolff laid out in his Murdoch bio, "The Man Who Owned the News," Murdoch may run a global, entertainment-news conglomerate, but he's a newspaperman in his blood. Yes, top execs at far-flung News Corp ops and his own children understand that newspapers are the company's past -- in terms of revenues and growth -- but that makes little difference as long as Rupert is in charge. It also will make little difference as long as profits flow like a golden river.

How much sense does it make to pull money from high-margin areas of News Corp to subsidize another? Call it transfer tithing, call it intra-corporate welfare, but expect to happen as necessary, Take just 10% of $1.5 billion, and you've got quite a war chest.

The Times' dilemma is not one that is unshared by other news media. In my new book, Newsonomics, I outline what I call the Digital Dozen. These are the world's largest news companies from ABC to the Washington Post. All are fighting to reach the potential, English-speaking audience of almost a billion. Each can find huge reach, at low cost, given cheap Internet distribution. All, though, face the equally huge challenge of managing and reducing high cost structures in the shorter term.

Consequently, those Digital Dozen news companies that are part of larger companies derive lots of revenue from non-news operations -- and they have a great shorter-term advantage. Think News Corp, which relies on its three-continent news operations for only about 20% of its revenues. Think Thomson Reuters, which depends on news for less than 10% of its income. Think Bloomberg, whose 280,000 licensed terminals drive the business, as it experiments with Business Week, TV and radio. As Andy Lack, Bloomberg's CEO of multimedia, put it picturesquely last week at the Software Information Industry Association conference
in New York City, "The reporters are a value-added service for the
data. If you're a journalist, being associated with an enterprise that
has that structure is a beautiful thing."

For the standalone news companies -- think New York Times, NPR, the Telegraph, AP in some ways -- it's a tougher slog. They have little cushion, little safety net. Maybe standalone news companies are obsolescent, profit or non-profit, or maybe the many efforts at diversifying business models will work to provide them cushions of a different sort.

Yet, today, beware the new blue man group that's on the offensive, simultaneously buoying the Journal and trying to sink the Times.

January 27, 2010

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

I've well used the Moses metaphors; others prefer the Jesus Tablet. But the dramedy around The Apple Launch has been as much Mel Brooks
as Biblical. It's just more interim technology after all. In fact, it's
become a tabula rasa for all our digital hopes and dreams, with the
silliness merging with the real import. (And will we remember where we
were when the announcement was made?)

That said, I'm enthusiastic about what tablets can do in the mid-term for news companies, old, new and still being born.

It
was nice visit to Mr. Jobs' Neighborhood, and see, finally, the iPad, a tablet device "thinner and lighter than an e-book." What's it mean for the
news world? He highlighted the New York Times and Time Magazine, but we
don't yet know the kind or extent of business relationships here. Off the Apple announcement, here are quick pluses and minuses for newsies:

PLUSSES

New marketing dollars, new marketing dollars, new marketing dollars.
Yes, three plusses. I believe that the biggest impact of the tablet, in
whatever six- to 11-inch forms stick will be in being a magnet for
marketing dollars. I'm not saying advertising dollars. We're seeing a
huge shift in money -- $66 billion a year in the budgets companies are
spending on their own marketing, according to an ongoing Outsell study.
The number in 2006: $22 billion. Marketers are going direct to
consumers, courtesy of multiplying Internet technology. One example: Honda's Power of Dreams.
Marketers are looking at the tablet this way: It's part of the new
"multi-touch" marketing landscape. Multi-touch, as in smartphone-plus,
let your fingers lead you in the emerging digital world. For marketing
that means experiential marketing -- social sites, games and more. The
news publishing connection: marketers want the right content to find
customers, and news audiences are part of that mix. How, when,
what and where: all to be figured out. Remember, no IAB standards for
tablet advertising yet; this is a 2011 revenue source -- if all goes
right.

The birth of long-form digital reading:
The first-generation news web has been notoriously short-form, read a
snippet and run. We don't like reading long stories on a work device,
like a laptop or desktop -- both with legacy to-do burdens -- or really
on the smartphones. We do like to nibble, a nibbling that's produced
relatively little engagement with customers online, and too few ad
dollars. On a cross-country flight last week, I looked over at my two
seatmates, and both were absorbed in their Kindles. (Yes, I was reading
a newspaper!) The hope here: the tablets will be a consumer device, not a work device, and that readers might enjoy reading news, as they have long done in print.

New revenue streams for content licensing:
If Apple wants to end-around other established players -- like Comcast
in the cable world and the wireless giants, Verizon and ATT -- it might
well pay publishers for some kinds of content. Already, it is offering
to pay Disney and CBS for their content. Certainly, not commodity news
content, but we can see advantages to Apple in lining up the New York
Times, high-quality business content and more. Ultimately, the tablet
can become a great local device: think local news and info + Yelp +
Angies List + entertainment guides + real community social interaction
and next-gen business directories. We're far away from that product
model yet; but someone -- why not a news company? -- will invent it.

MINUSES

Slow adoption. If the iPad 's initial price point is high -- though
inevitable price drops will follow -- we could be waiting until 2012 to
see meaningful adoption rates. [Add: With 3G pricing of $699 and up, this product may not be mass in 2010, but as price drops kick in, expect it, and its brethren, to become mass products by 2011.]

The familiar news bypass: You know what I mean. Tech product
companies have long devalued news, considering it like air, something
you get cheaply from somewhere, but not worth paying for, like video.
News companies are not immediate players in the Apple launch, so we may
be seeing history repeat itself.

It's a visual medium. That's why magazine publishers, through the Next Issue Media
nascent consortium got out ahead of news publishers first on this. When
we think tablet, think this new trifecta: Mobile, Video, Social. Those
are the new connection points in our evolving digital lives, and news
publishers are generally behind the curve in all of them.

Woeful technology integration: If news publishers want to
offer across-the-board -- newsprint, desktop/laptop, smartphone, tablet
-- access to their products at good price points, they need to
recognize those customers across platforms. Some like the Wall Street
Journal are ahead on this curve; others, like the New York Times, are
behind -- which is one reason the Times won't go metered until 2011.
You have to be ready for prime time to play in prime time.

It’s a good one, given that making a mid-January
announcement of a 2011 business move is highly unusual in any trade. And a year in Internet is something like 11 in real life.

So why did the Times do it?

We could say that’s a fast-track, comparing it to the health
plan’s 2014 (?) implementation, but that wouldn’t be fair, would it?

So let me offer a mix-and-match of three likely reasons for
the announcement:

It’s a
Signal to Wider News Industry:Recall
how nervous U.S. daily publishers were when NAA sponsored “paid content”
get-togethers in mid-2009. Everything was out in the public, with vendors uncomfortably
presenting panel-style. The word whispered: "anti-trust." So publishers can hardly convene a meeting in midtown
to plan a next-decade paid content world.

In fact, the Times’ move follows the many Rupert Murdoch
statements of 2009, saying News Corp publications, most not in the US, would be
finding some way to charge readers. In addition, Hearst is busy working on pay
wall plans, Skiff-enabled and otherwise, while numerous companies are working
with Journalism Online, strategizing how to launch their own metered and/or
niche content plans.

So the Times sends a signal to others: we’re going paid,
too. If many publishers follow the paid path, that’s good for the Times – less
threat of free content competition for readers.

It’ll
Take Time to Lay the Foundation and Infrastructure for the Moves: It has
the taken the Financial Times several years to develop the sophisticated
analytics and tracking technologies to optimize its metered system. While in
consideration by the Times for awhile, it will take the company time to get the
technology rolling.

Further, the Times made it clear that it wants paying
subscribers to enjoy a seamless experience across digital products, products
that will soon include desktop/laptop access, smartphones and tablets. That’s
easily said, but requires all kinds of technology integrations and customer
relationship coordination and service.In this scenario, the Times wants to make sure to get the new program
right.

It Gives
the Times Time to Change Its Mind or Tweak the Plan: Let’s say it’s the
best plan the Times can come up with today, in early, 2010. Let’s also say we –
and the Times – have no idea what 2010 has in store. Will tablets revolutionize
digital news reading and provide powerful new ad streams? Will Google decide it’s
in its best long-term interest to share revenue with news providers who supply it
the free raw fuel to feed its ad engine?
Will Apple and/or Comcast decide to pay the Times a hefty sum to include its
content in their new digital products, as they pay TV/video content providers?

Let’s say some things just come out of complete blue. The
Times can plan its new metering system, adjust accordingly and see how the
uncertain, post-recovery digital landscape plays out.

So there are three possibilities. We can mix and match them,
giving us something to speculate on until Apple’s Second Coming announcement in
a week.

It's a big bet. The New York Times, which has been thrashing about every possible kind of business model in the last six months, is making the bet on metering, meaning readers will get some number of free articles per month, then be told to pay up to get more. Nine quick questions as we digest the news:

Why now? The Times is making one, maybe penultimate, bid to save its cost structure. It still employs something more than 1100 journalists, at high wages. Those wages have been well-earned by dint of skill and accomplishment in most cases, the the internet economy and the advance of low-cost, "good-enough" content (make sure to read James Rainey's great piece, "Freelance Writing's Unfortunate New Model") is doing further damage to professional journalism economics. The Times metering plan is intended to provide a strong second leg, after advertising, to support that plan.

Won't metering kill the golden goose of mass advertising? First, let's note that Denise Warren, who runs advertising at the Times generally, is in charge of NYTimes.com. That provides a keen tie between the new experiment and the Times' main source of funding. As Warren has recently said, "If we move in this direction, we want to make sure that we're not
dipping into the advertising bucket to get money out of the subscriber
bucket." Of course, that's easier said than done; the Times thought TimesSelect would be more controllable than it was. One curious potential upside here: those who do subscribe via metering may become among the most lucrative ad targets. Look at it this way: the Times will know the most about these customers -- more frequency of usage; more clickstream data; more declared preference data -- and that's highly useful in targeting advertising.

Where else might the Times find new revenue soon? Think the other Big Apple. As Apple releases the tablet, it needs content friends. It can "pay" the Times in prominence; the two could also figure all manner of interesting revenue shares. Apple is already offering payments to companies like Disney and CBS, as its next-gen Apple TV plans take on the cable giants. Why not pay for premium news content?

What does "frictionless experience across multiple platforms," in the Times release this morning, mean? I think this is one major move, if the Times can pull it off well and quickly. In the age of the smartphone, the coming tablet, and (coming a bit after that) the Internet-mediated livingroom TV monitor, readers are already coming to expect easy, and smart, access to the their content wherever, whenever. They also will come to expect -- we're seeing it in some iPhone apps already -- the stories they save on one device to be known by another; ditto email sharing lists, stock portfolios, favorite sports team preferenes. If the Times can provide such synchronicity, then readers who are asked to pay can understand the charge as, in part, an access charge. We, Americans, love to pay for access -- think massive cable and wireless bills -- we just have thought digital news content should be free. At a panel I moderated yesterday in New York, Dow Jones consumer chief Todd Larsen, indicated a similar philosophy about universal access. One rub here to watch: who owns the customer relationship with the emerging tablet. Amazon has stubbornly clung to the position that it will "own" the customer (hey, wait a minute, that's me), while news companies -- getting a glimmer of an all-device-access future -- have pushed back, and are negotiating with Amazon's Kindle competitors, to keep their customer touch.

Isn't it suicide to charge your best digital customers for content, while allowing others to get some for free? Not really. In fact, that's what the Wall Street Journal has been doing for years. Remember the numbers: about a million paying online subscribers.....and another 19 million uniques, who get to Journal content through search engines and all manner of side doors for free.

What can we learn from the FT experience? It's all about propensity modeling -- learning patterns of user behavior, how many articles of what kind readers read within certain periods of time. It's about tweaking the dials, up and down, to capture the payments of truly loyal readers who find continuing value in the brand, while not losing a critical number of occasional visitors. It's about learning how to convert key parts of miscellaneous search engine traffic -- and understanding that most of it will never be converted.The FT offers several tiers of access: a few free articles without registration, 10 with registration and then access through subscription. The big eye-catching FT recent announcement: Content revenues are surpassing its print advertising take.

Is the FT experience relevant to the Times? Yes, no and we don't know. That's in part, what makes it a fascinating experiment to watch. FT.com managing director Rob Grimshaw has told me how much the company continues to learn about customers, based on its work. One major key: getting real smart about data. The FT has hired data whizzes, gotten outside news industry thinking working with the ideas of companies like eLoyalty and people like Jonathan Mendez, to expand its knowledge base -- and then has worked the knowledge. Yes, we know business/financial content has been the leading edge of paid content, so far, but the modeling under the FT model may be the most instructive here.

What's the downside? Other than major blogosphere blowback -- winds developing tweet by tweet -- the Times runs the risk of TimesSelect 2. If readers, and lots of them run into paywalls and decide to quickly move on to still-free sources -- sources as top-notch as the BBC, Reuters, NBC, NPR and many more -- then the model could fall apart: the Times would lose its mojo as top digital (non-aggregator) news site and retard its digital ad potential. That's what makes it a big bet.

What happened to the membership scenario? One strategy the Times considered and is now apparently letting go of is membership. That would have been staying all free, but, NPR-like, asking those readers who really value "the service" to pay up. MinnPost has surpassed 1500 members in the Twin Cities, while GlobalPost has signed up about 500. Membership is promising, but tough, and ultimately, it appears the Times believes metering will pull in far more money.

December 08, 2009

Many of us shared the three-minute Sports Illustrated tablet video over the last week, and now watched at least a quarter million times. It was an ah-ha moment, amid the rat-a-tat-tat of daily digital news, moves and announcements. We could see a different kind of news reading future, one that has long been promised, hinted at, drawn in pencil and on whiteboards for, it seems, like decades. Editor Terry McDonnell's voice-over was matter-of-fact; the product told the story. Real reader choice and interactivity, and our ease ability to go deeper and broader, or pull back and just browse. Glorious, real-world color. Immersive advertising.

I'm hoping the SI demo is the appetizer for the entree announced today.

Time, Conde Nast, Hearst, Meredith and News Corp made the formal announcement of their new digital consortium today. It names four basic areas of work (around content management, formats, advertising and a consumer storefront), all of which I think are aimed at fleshing out the reader and advertiser proposition for the new generation of tablets. As importantly, they intend to establish a new business model itself for their digital products. These would include both magazines and, yes, newspapers, if those papers can make the transition to the visual age.

Here's what I think is going on here: the digital do-over for the next decade. With the flurry of year-end activity, it's as if publishers, as they ready their decade-end lists for publication, have made one for themselves.

Top of the list: Get the Next Decade Right.

Web browsing -- desktop and laptop -- has been a quicksand for publishers. Alluring, it drew them in and then got them stuck. Maybe, they hope, this next generation of reading devices -- tablets (and maybe mobile) can re-start the engines, putting them on the curve (if not ahead of it) with readers and advertisers, instead of being sent to the dustbin of history as dowdy, old, dying media.

It makes a lot of theoretical sense, though the payoff is at least 12-18 months away, and the battles over the money in web browsing will continue apace.

That said, standards battles are always tough ones, and it's easy to get on the wrong side of history. This consortium seems aimed, properly, at open standards, which would be the smart play for publishers. It's impossible to call a winner in the coming Tablet Wars. Sony Reader, Kindle, PlasticLogic, iRex, Hanlin, Cybook and apparently lots more are out there; it's starting to sound like a set of galaxies from Star Trek. All of these may be diversions, though, from the titanic Amazon vs. Apple battle to come, given the marketplace might of both.

These tablets will take off, I believe. One key reason: they are consumer devices largely, meant for ah-ha pleasure of reading and entertainment, not just multi-purpose "computing" devices, like our first generation digital experience.

For publishers, the basics, here, are longstanding ones:

Make sure the products can fully bring to life their current and evolving new and feature content and storytelling.

Fully exploit the commercial story-telling, experiential abilities of the new medium, offering much beyond pay-for-space "advertising".

Maintain a direct customer relationship, certainly with readers and potentially with advertisers. Rupert Murdoch fairly frothed at the mouth as Jeff Bezos said he'd be the middleman between the Kindle and News Corp customers; that's a proper froth.

Build a flexible enough content management support system that can both feed multiple device and formats, and then rock and roll with ongoing build-outs to come.

A storefront? Well, that will be more problematic. How big a garden will it be, and who else will want to step inside its walls? Storefronts may seem like a logical path to "owning" distribution, but that may turn out to be old-world logic. One route to watch here will be Apps. With more than 100,000 in the iTunes store, one way to picture the world world to come is a tablet with apps gone wild. They can easily morph for tablets, and here the Apps stores have an early edge.

December 03, 2009

Publishers
seem to be saying, in not-quite-on-key unison: The next Internet decade is
going to be different than the last one.

They are all living with the
consequences of unintended Googling, as their own sites have become secondary
players to the search aggregators, Google, Yahoo, AOL and MSN.

In a week that
saw the Tiger Woods Affair look like a Sopranos’ Episode Gone Mild and the
Sheila Dixon gift card conviction look like a David Simon outtake, we saw more
skirmishes between Rupert Murdoch and Google. Rupert led off the FTC save-journalism
workshop with a well-covered
anti-Google benediction, and Google followed with a couple of blog posts
tweaking its news search protocols. The conversation, as usual wasn’t in the
(FTC) room, but conducted on and through the web. That should tell us something.

It’s quite a
cat-and-mouse game. The cat is Rupert Murdoch, a lion in the winter of his
career. Astoundingly, he’s become the leading spokesman for American
journalism. The mouse is the crafty Google, adjusting its algorithms and its
tactics, faster than publishers can bemoan, “who moved my cheese!”

It's not just
the dollars and cents at stake here -- though, of course, that's the
fundamental issue. It's the dollars and making sense of what is going on as
2009 closes.

It can seem like a simple toggle. Turn the news free or lock it up. There are, though, many sharp edges here. To that point, let me try Nine Questions about this confusing landscape of threats and promise:

1. If Rupert Murdoch is now the Really Bad
Cop, does that leave Tom Curley as just the Bad Cop?

Both have
called for a reordering of the news-search landscape, but now AP CEO Tom Curley
is starting to appear as the reasonable alternative to The Rupert, who keeps
raising the temp, especially, on Google.

The News
Corp/Microsoft dance and Murdoch’s cries of “Pirate!” have won headlines, but
AP’s re-negotiation of its licensing deals with the search aggregators have the potential to have
more impact. AP's license deal with Google is up at the end of the year. In the
throes of unprecedented change itself, AP's re-negotiation tries to put the new
Digital Coop at the center. The idea: rich, universally tagged,
delivered-on-the-fly indexes of news content add extra value to news content
itself. AP hopes its negotiation will both increase its own take from search
engine licensing -- and provide a model for individual newspaper
companies.How much a “model” would
be adopted by an increasingly cantankerous, go-your-own-way industry is highly
problematic.

Still, AP, with its own voluminous content and newspaper relationships may be
more of trend-setter than the publisher of two American dailies, News Corp’s
Wall Street Journal and the New York Post.

2. If Alicia calls, will you pick up? Sure, in public, Rupert is throwing grenades. His complaints
about Amazon and Google, some valid, others just good theater, draw attention
and soften the battleground. Behind the scenes, though, he's moving forward
with project “Alicia.” News
Corp has apparently allocated several million dollars to starting up the news
portal, a Hulu-for-news site. Perhaps a free/paid hybrid portal, perhaps a paid
one, the notion is to divert traffic from the search engines to a news
company-controlled site. News Corp has pitched the idea of joining in to at
least a handful or two of publishers, in both the U.S. and U.K.Critical mass of news – compared to the
several thousand news sources indexed by Google – is, of course fundamental to
giving any such play a prayer at success. Big question: could Alicia ever gain
sufficient breadth to really compete -- and charge? Is Alicia really a
bargaining chip with the search engines, or are the search engine wars a chip
for Alicia? Or both?

3.Isn't it better to “negotiate” with
Microsoft than against yourself? For several years now, publishers
have tried to get Google to negotiate better terms, the acceptance of a new
content handling protocol (ACAP) and, more recently, the adoption of an
Attributor-based anti-piracy system. They haven't gotten far. In essence,
newspaper companies have been negotiating against themselves.

Google has repeatedly said: If you don't want us to
index your content, just tell us, and we'll be happy to stop. Just use our
on/off switch. End of discussion. End of “negotiation.” In fact, its twin moves
this week – allowing publishers more
flexibility in news search rules and in its Five Clicks Free program – are the
latest expressions of that public pose. It knows that the publishers’ current
addiction to search traffic makes the on/off choice (even with this week’s
nuances) not much of a choice at all. So in part, Murdoch (and more quietly,
AP’s) move to bring the anti-Google, Microsoft, to the table creates a sense of
real negotiation, competition for perhaps
scarce assets.

4.What is Google's (and search engine traffic) worth)? Most
news publishers will tell you that about 25-35% of their traffic is driven by
Google and that more than 50% of it is driven by search engines generally.
They'll also say that about a quarter to a third comes directly to their sites
-- and that these are the regular customers they care about. They'll tell you
that it is the number of monthly sessions and the number of these page views that
these customers generate that should
make the most sense in building a real, digital business.

We can look at
this view in a couple of ways.

It may be
simply old-fashioned, an outgrowth of the old way of looking at media
businesses in terms of stable, "owned" readerships. In this view, digital
news readers are happy free agents, flitting about the web, picking and
choosing what they want, without being tied down. The only thing that counts is
a single view -- and what marketers can do with it, getting the reader to take
notice of a product, service or brand, or seducing them into an interactive
experience. There is lots of technology trying to make that match of reader and
product, watching readers' clickstreams and delivering appropriate ads. Consider
the marketer's mantra of the day: We buy audiences, not media. Through that
lens, publishers may be fighting an old war. The new atomized (content unit by
content unit; ad unit by ad unit) world gives considerably less value to the
reader's relationship with the publisher's brand.

The
alternative view is that news publishers have been hopelessly seduced by
first-generation web measures. Those metrics all said: more is more. Those
counts first focused on uniques and page views. Then time-on- site followed,
but, of course, that's an averaged number, of all uniques. Now Nielsen has introduced average
number of sessions per month, but of course, that's an average of sessions for all those uniques as well.

Publishers are
telling me they are increasingly focusing on those uniques visiting for two or
more sessions within a month, essentially those that are their ongoing
customers. These are the people that Journalism Online is targeting as it works
with publishers, trying to figure which of these more loyal customers will pay
for content. These are the users that sites as small as MinnPost talk about
when they sell non-CPM-based sponsorships.

So in this
view, it's a matter of establishing a new, fairly loyal digital readership
(online + mobile) and then figuring out how best to monetize it widely --
through ad and subscription products.

It's an
alluring argument, but it looks like though it may be swimming against the currents of
modern marketing. Still, if publishers believe it, it leads them to discount
much of that traffic they get from search engines, and that's informing the new
round of aggregator angst.

5. So are we into the age of Junk Traffic? In 2009, news publishers figured out that the Internet is
indeed infinite. It's not the scarce world of print publishing or broadcasting;
it's an expanding universe that by its nature has no bounds. Did anyone ever
try to measure human conversation itself -- or more to the point, monetize it?
So in this infinity -- treasured by readers and abhorred by people who make
their money selling space or time in a finite world -- more is no longer more.

Don't tell me
more page views are better, they say. Don't tell me more unique visitors are
better. Tell me why 50% or more of my ad inventory goes unsold (and how do I
get a decent chunk of that every-page-is-useful paid search business, anyhow?). If, in fact, these
visits and odd once-in-a-month, once-in-a-year page views happen on my site,
does it really matter? If a one-page reader falls on my site, can my finance
department hear even a peep?

It’s based on the growing assumption that some of the search
engine traffic isn't, at this point, valuable. It's akin to newspaper
publishers cutting "junk circulation" -- outstate circ, free State
Fair copies and the like -- similarly disdained by advertisers.

Yes, it’s easy to say news publishers should better convert
some of those odd visitors to real customers (and they should), but the sense
of Junk Traffic is getting more pervasive.

November 12, 2009

It's hard to gauge the impact of New York Times and Wall Street Journal moves into metro markets. They could be simple, print retention strategies aimed, at holding on to valuable print readers -- the magnets for still-lucrative print advertising -- for as long as possible.

Longer-term, it could be a Last Man Standing strategy, figuring that newspaper readers may well scale back their daily reading to a single paper, as they increasingly go digital. Or, it could be toehold, for an expanded digital strategy, adding local options to their national and global products.

So far, all indications are that the simplest explanation -- print retention, small amount of growth -- is the driving purpose. That makes sense: 85% of the overall revenues of these companies is still tied up in print. Give the readers another reason to pay a lot of money for the print sub, and you can hold on to more of them. The regional editions -- the Times in the Bay Area and Chicago and the Journal's announced one in San Francisco (and L.A. and Chicago, perhaps, as well) -- also give the papers better regional ad targeting, especially in categories like finance, technology and luxury.

So far, my reading of the Times' new coverage -- a couple of extra pages in the Friday and Sunday editions -- is that's it not any kind of game-changer. It's good, Times-like coverage, but I doubt that a half dozen stories each of those days (though trumpeted with a Page One "local" sticker) is going to make much of a difference in a buy/don't buy, renew/let it go decision.

Of course, both papers have been in metro markets for a long time. Yet, they've been a supplemental read for newsies, people whose daily education hasn't been complete 'til they've trawled the local metro paper, the Times and/or the Journal.

By definition, that's an older crowd, an elite that has given each of the two papers a few percentage points of household penetration in the cities. The Times hasn't gotten above five percent outside its home market. For examples (from data gained earlier this year):

Boston: 2.3% Sunday & 1.6% Daily

Fort Myers/Naples: 2.2% Sunday & 1.5% Daily

Hartford/New Haven: 3.0% Sunday & 1.9% Daily

SanFrancisco: 2.3% Sunday & 1.6% Daily

Washington DC: 2.2% Sunday & 1.5% Daily

West Palm Beach: 3.2% Sunday & 2.4% Daily

Given that the Journal's print circulation is now about double the Times -- 2 million to 927,000 -- we'd surmise that the Journal would be two to three times those numbers. (Addendum: A couple of alert readers have noted that about 400,000 of the Journal's 2 million may be online-only subs, bringing down the print-to-print, head-to-head comparison somewhat. Worth taking into account.) That's partly because of the number of its readers and partly because the business-oriented Journal's penetration in New York should be considerably less than the Times, still in part a hometown, general interest paper for New York. The Times home market has been accounting for about 40% of its Sunday sales and about 45% of its daily sales.

So if that's today, let's look at tomorrow.

The Times and Journal aren't entering these markets in a vacuum. We've never seen such activity in local markets as we're now seeing. From public radio stations getting newly news-aggressive to Politico's big DC move to growing start-ups to metro and state investigative watchdogs to the Examiners expanding, we've never seen such ferment around local news. My sense: as metro dailies have cut staff and space, they've left their flanks open, newly emboldening would-be competitors for readers and advertisers.

In fact, the potential connections between and among new and old players -- as just one example, the Times, for instance, has been having continuing talks with KQED, the strong Bay Area public radio station -- are being weighed.

The key here is aggregating as much high-quality content under your own brand -- Journal, Times, whoever -- as cheaply as possible. In the Bay Area, the Times is adding coverage without adding full-time staff; in Chicago, it has partnered with the new, and intriguing, Chicago news coop. In general, neither the Times nor the Journal can afford to add much high-salaried staff to fuel these editions. So partnering is key, though dicey in execution, with logistics, standards, immediacy and other issues always to be worked out between editors traditonally internally focused.

The one exception: the Journal looks like it is adding 12 reporters to a NYC edition. That makes more sense. It's in line with the Journal's head-to-head competition with the Times as it targets the Times' readers and advertisers -- medium-hanging fruit for the Journal. Further, it's personal for Murdoch. Plus, it's worth sending the message of "we're hiring," as the Times cuts back another 100 people in the newsroom. Psychological warfare.

I'm still expecting outside/in, inside/out web national/local products, maybe later in 2010. Why not a Journal or Times module or two on WBUR.org or KQED or MPR News? Why not a Bay Area module on NYTimes.com or WSJ.com. Why not more NPR modules on non-public radio sites? Toggle on, toggle off, depending on your local preferences. The target: increase time on site for both parties, as much as possible.

November 05, 2009

So the newspaper industry is taking a page from indie film ("A Day Without a Mexican"), dailies are hiring execs from the alternative press, and we're seeing new, almost-daily, mating rituals between older and newer news media.

What's going on? Nine questions to start:

How about a week without the Chicago Tribune? Yes, I know the idea is a week without the AP, but isn't the idea a bit behind the public's curve? The latest circ numbers showed that more than 40,000 readers have recently decided to go a week without the paper , down -9.72% to 465,892. It's telling that the Tribune company papers are going AP-less, but their websites aren't. That tells us that precious, and costly, newsprint will be used mainly for local news, but pixel-based newsreading will include the wider world. Which, of course, makes the formerly mass market newspaper a niche -- what happened locally yesterday -- and the web mass. Sam Zell's still on the AP board, which got some good news this week as 50 papers withdrew their "cancellations". (Back in my newsroom days, I always loved "advisory cancellations.") Here's guessing AP will be around in the news business lots longer than Sam Zell.

How do you put a new gloss on the Chron? It seems counterintuitive, but you improve the paper stock here and there, moving in some semi-gloss super-calendared paper. Sure, monthly high-gloss magazines are the only pubs failing faster than the daily press, but the San Francisco Chronicle's move seems a simple, and hardly earth-shaking, one. Christmas, I have on good authority, is still coming. Get some higher-profile advertisers, charge them a bit more than the cost of the better paper, and you have a few more profits. Pre-recession, both the New York Times and the Wall Street Journal -- now both new entrants for targeted Bay Area advertising, competing against the Chronicle -- were doing quite well with luxury ads. Luxe ads will make a comeback, and maybe the Chronicle's new offering will help. Besides, with daily circ down 25.8%, to 251,782, a little better paper costs a lot less than cheaper paper the Chronicle used when it had 525,00 daily circulation, back not long ago, in 2002.

Will alternative weeklies become yet another local competitor to the dailies? The alternatives have survived the recession better than the dailies, but curiously, they've not become big online players. Instead, the Yelps, Craigslists, AngiesLists and OpenTables -- among many others -- have moved into city markets. Now Village Voice Media -- the biggest chain in the country, with 10 bigger-city weeklies -- has launched the Voice Media Group, aggregating its own and other sites. As worlds blend together, the head of the alternatives' trade group, AAN, has just succeeded Scott Bosley as the head of the American Society of News Editors. Rich Karpel starts Dec. 1.

You think Pox News is bad, have you tried Headline News? So Sesame Street is taking a hit for taking on grouchy cable news. But Fox seems high like opera compared to the bad melodrama of CNN's Headline News (HLN). It's hard to believe anyone would pick the station, but many of us are subjected to it, me at the gym. Soundless, I watch its crawls with mouth agape. Yesterday, in just a few minutes: "Pregnant Woman Found Dead," and "This Just In -- Body at Rapist's Home Identified," repeated countless times. It ran with the Garrido case (kidnapper/child molester in Northern California) for weeks, with a headline about bones on adjacent property being checked to see whether they were animal or human, and whose. (Animal, of course.) Macabre, ghoulish, and I think far more hurtful to the watching psyche than the freak shows that talk cable has become. Recall that HLN (Headless News?) surpassed its big sister -- CNN -- in the last ratings cycle, where CNN , the nicest if least watched cable net, finished last.

How well will Dow Jones do with the upsell dance? Much "paid content" strategy at Dow Jones seems to smartly understand that it's easiest -- and cheapest -- to sell new stuff to the customers you already have, especially when many of those can charge it to the company store. So we have the upsell on WSJ Mobile, just launched, and now WSJ Pro. Pro is first being sold to enterprise users -- a new mix of two Dow Jones products, the WSJ.com and Factiva, a rich aggregation of news sources -- and in January, it will begin be offered to individuals.

Aren't we seeing new digital news versions of The Dating Game? You can't turn around without hearing about new combos. ProPublica and Marketplace on an investigation into University of Phoenix. The Center for Investigative Reporting and Frontline on a Carbon Watch initiative, led by the well-decorated Mark Schapiro. CBS and Global Post, tying up around global coverage generally. As the old arteries of high-quality content creation and distribution shrivel, new ones are being forged seemingly every day.

Will public radio grab the regional aggregation opportunity? Readers love aggregation -- from journos' daily check-in of Romenesko to everyone's use of the big news collections of Yahoo, AOL, MSN and Google. Newspaper and local broadcast companies, though, have been slow to make themselves regional aggregators. Now Minnesota Public Radio, beginning to make a move to assert itself as a major online news players, has picked up NewsBobber. Bob Ingrassia, a 15-year veteran of newspapers who is now leaving Internet Broadcasting as he takes NewsBobber to MPR, says it's a quite simple proposition: "How do people sort through it all?" He tells me he manages the impressive, month-old site in the morning and evening and has harnessed all kinds of cool, free tools to rank Minnesota sites and blogs. So think about it: once again, a guy does in his spare time what better-staffed media can't figure out.

Will the Chico experiment be the new chic?
It makes a lot more sense to try charging people in a non-metropolitan
market with far less competitive news media. So MediaNews' announced
pay walls in Chico and York, Pa will be worth watching. MediaNews'
Howard Saltz makes this point: "But we are
not giving away our premium content for free." The big question for the
Chicos, the Yorks and others: What will readers in fact consider
premium, and worth paying for? I've long thought that the smaller the
paper -- think weekly out in the hinterlands -- the greater chance to get
readers to kick in a few bucks extra for online access.

Is that Awl the news that's left to print? Sometimes a spreadsheet's worth more than a thousand words. Check out The Awl's circ charting, something that you won't see coming out of an industry association. But, take your vertigo pills first. Check out top newspapers -- from the Journal and Times to L.A. Times and Washington Post, and see what conclusions you draw.